Clark Road Developments Ltd v Grande Meadow Developments Ltd - [2017] NZHC 2589

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002165 [2017] NZHC 2589

BETWEEN
CLARK ROAD DEVELOPMENTS

LIMITED Applicant

AND

GRANDE MEADOW DEVELOPMENTS LIMITED

First Respondent

NEW ZEALAND GENERAL REAL ESTATE LIMITED

Second Respondent

KINGSTONE PROPERTY LIMITED Third Respondent

CLARK ROAD LANDOWNERS GROUP (ICSA No 1) LIMITED Fourth Respondent

CLARK ROAD LANDOWNERS GROUP (ICSA No 13) LIMITED Fifth Respondent

CLARK ROAD LANDOWNERS GROUP (ICSA No 8) LIMITED Sixth Respondent

Hearing: 19 October 2017

Counsel:

KF Gould for Plaintiff
JD McBride for First, Second and Third Defendants

Judgment:

24 October 2017

JUDGMENT OF DOWNS J

This judgment was delivered by me on Tuesday, 24 October 2017 at 4 pm pursuant to r 11.5 of the
High Court Rules. Registrar/Deputy Registrar

CLARK ROAD DEVELOPMENTS LTD v GRANDE MEADOW DEVELOPMENTS LTD [2017] NZHC 2589 [24 October 2017]

The case

[1] Clark Road Developments Ltd (Clark Road) seeks an interim mandatory injunction requiring the first, second and third defendants to pay it almost $3 million. The sum is said to be payable by virtue of a development cooperation agreement (the DCA) between Clark Road and the defendants. Under the DCA, disputes must be resolved by arbitration, save for “urgent interlocutory relief”. The defendants contend the application is a claim for damages masquerading as one for urgent interlocutory relief.

[2] I heard the application as Duty Judge.

Background

[3] Clark Road is a property development company. So too the first, second and third defendants. All four companies are subdividing land at Hobsonville Point into residential sections. On 5 August 2015 the development companies entered the DCA. The purpose of the agreement is “to provide a structure and procedure to enable the owners to undertake the design, construction and commissioning of infrastructure which will enable further subdivision and development of each Owner’s land”.

[4] Under the DCA, the parties must enter various infrastructure cost sharing agreements. These are defined in the DCA as separate but collateral agreements between the relevant owners in relation to the design and installation of specific infrastructure. Each infrastructure cost sharing agreement is to provide for incorporation of a separate company for the purpose of representing the owners who are party to the particular agreement.

[5] The fourth defendant is a company formed in respect of “Wastewater infrastructure”. The fifth defendant is a company formed in respect of “Midgley Road infrastructure”. The sixth defendant is the central co-ordinating entity formed for the purpose of facilitating infrastructure construction. These defendants took no role in the application.

[6] The parties commenced negotiations in November 2015 with a view to drafting and executing the various infrastructure cost sharing agreements. While draft agreements have been produced, none has been signed. Substantial work has, however, been completed in respect of three aspects of infrastructure: wastewater, stormwater and Midgley Road. But contractual arrangements in relation to these works have given rise to disharmony.

[7] It was anticipated the companies incorporated to oversee these works would contract with construction companies,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] NZHC 2589
Decision Date: 24 October 2017

CaseChat Overview and Summary

Clark Road Developments Limited sought an interim mandatory injunction against Grande Meadow Developments Limited and two other companies for the payment of almost $3 million. The sum was claimed to be payable under a development cooperation agreement between Clark Road and the defendants. The defendants argued that the application was a claim for damages disguised as one for urgent interlocutory relief. The court considered whether the relief sought was compatible with the Arbitration Act 1996, which required the parties to submit disputes in connection with the development cooperation agreement to arbitration. The court held that the relief sought was incompatible with interim relief as provided for by the Arbitration Act, and therefore declined the application. The court also held that interim mandatory injunctions for the payment of money were rare and required special circumstances, which were not present in this case. The court declined the application and invited the parties to submit memoranda on indemnity costs if costs beyond 2B were pursued.

Orders